Look For Gold To Build A Base After Bloodbath
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Yesterday’s close: Settled at 1290.3, down 27.9
Fundamentals: Yesterday was a bloodbath for the metals. Gold had its worst session in about a year and half and closed at the lowest level since December 22nd. The reversal of the reversal in the Dollar surprised many but mostly the Gold market as liquidation kicked in below the psychological $1300 mark. The 10-year Treasury hit the highest yield since 2011. The bad news for Gold is that that the inflation numbers are not really there, and the Dollar is higher. The Dollar and yields will remain a key headwind through today’s session.
Technicals: Price action is under severe pressure and the overnight high stalled at previous support which his now resistance. The door is open to test major three-star support at 1277.5-1278.3. A hold at this level will allow Gold to build a base. While this year’s pattern is no longer constructive in the near-term, the metal must close back above 1302.3-1306.6 in order to neutralize immediate-term weakness.
Resistance: 1296.2**, 1302.3-1306.6***
Support: 1277.5-1278.3***, 1247.2-1250****